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RRB is showing considerable improvement in their lending and deposit performance. The
deposit mobilized increased over the period was 8.23 times and lending was 13.10 times and the
CD ratio increased to 65.79% up to 2015-16.

Deposits: Deposit Mobilization is a part of banking services and one of the essential jobs of
RRBs. Nonstop and sufficient amount of deposit mobilization will ensure the banks to operate
their function of lending and investment on which the success of the bank depends. Being an
essential job the table 2 shows that the deposits of RRBs increased from Rs. 38,277.78 crore in
the year 2001 to Rs. 3,15,048 crore in the year 2016 registering the growth rate 15.39%. The
table also enlightens that after merger process the deposits were increased from 16.36% in 2005
up to 21.29% in 2009, but after 2009 the public deposits were start declining.

Loans/Advances: The main motive behind the birth of RRBs is to improve the credit conditions
in rural areas and to develop rural economy by providing credit and other banking facilities to the
rural population. It is shown in the table 2 that the advances and loans given by all the RRBs in
country increased from Rs. 15815.80 crore in 2001 to Rs. 2,07,279 crore in 2016 registering the
growth of 14.55%. We can analyze from the table that, merger process not only affect deposits
but also loans and advances after 2010 loans and advances were start declining.

Credit Deposit Ratio (C/D Ratio): The geneses of RRBs taken place to develop rural economy by
providing credit and other banking facilities for the development of agriculture, trade and other
productive activities in the rural areas. The credit deposit ratio of the bank indicates the creation
of credit out of the deposits mobilized by the banks which has been furnished in Table-2. The
table exhibits that CD ratio increased from 41.32% in the year 2001 to 65.79% in 2016. There
has been consistent growth in the sphere of credit deposit ratio. The year 2013-14 registered a
higher rate i.e., 66.56%.

The ANOVA test is performed to compare the performance of deposit mobilization with
loans/advances of RRBs, to test whether the merger process has resulted in improving the
performance of these banks in India during 2001-2016.

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The hypothesis framed as follows

HO: There is no difference in the performance between Loans/Advances and Deposits of the
RRBs
H1: There is difference in the performance between Loans/Advances and Deposits of the RRBs

The ANOVA test result shows that the mean level of loans 82088.58 is less than that of deposits
135113.43. According to the test results, the calculated value of F=3.887561 is less than with the
value critical F=4.1708767, with a critical value of .05. Therefore we may conclude that, this
analysis supports the null hypothesis that merger process does not affect the performance of
loans/advances and investments of the RRBs.

Table 2 Deposits Mobilized and Lending Operations Of RRBs (Rs. In Crore)

Credit
Increment
Years Deposits % Increment Loans/Advances Increment In % Increment In Deposit
Rs. In Crore) In Deposits In Deposits (Rs. In Crore) Loans/Advances Loans/Advances Ratio

- -
Mar-01 38,277.78 15,815.80 - - 41.32

16.36
Mar-02 44,539.15 6,261.37 18,629.55 2,813.75 17.79 41.83

12.48
Mar-03 50,098.00 5,558.85 22,158.00 3,528.45 18.94 44.23

12.48
Mar-04 56,350.00 6,252.00 26,113.00 3,955.00 17.85 46.34

10.28
Mar-05 62,143.00 5,793.00 32,870.03 6,757.03 25.88 52.89

14.78
Mar-06 71,328.83 9,185.83 39,712.57 6,842.54 20.82 55.68

16.56
Mar-07 83,143.55 11,814.72 48,492.59 8,780.02 22.11 58.32

19.18
Mar-08 99,093.46 15,949.91 58,984.27 10,491.68 21.64 59.52

21.29
Mar-09 120,189.90 21,096.44 67,802.10 8,817.83 14.95 56.41

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20.67
Mar-10 145,034.95 24,845.05 82,819.10 15,017.00 22.15 57.10

14.62
Mar-11 166,232.34 21,197.39 98,917.43 16,098.33 19.44 59.51

12.09
Mar-12 186,336.07 20,103.73 116,384.97 17,467.54 17.66 62.46

13.50
Mar-13 211,488.00 25,151.93 137,078.00 20,693.03 17.78 64.82

13.24
Mar-14 239,494.00 28,006.00 159,406.00 22,328.00 16.29 66.56

14.00
Mar-15 273,018.00 33,524.00 180,955.00 21,549.00 13.52 66.28

15.39
Mar-16 315,048.00 42,030.00 207,279.00 26,324.00 14.55 65.79
 Source Annual Reports of NABARD, From March 2001 to 2016

Anova: Single Factor

SUMMARY
Groups Count Sum Average Variance
Deposits 16 2161815.03 135113.4394 7762626802
Loans/Advances 16 1313417.41 82088.58813 3809192076

ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 2.25E+10 1 22493078801 3.887561504 0.057928242 4.170876757
Within Groups 1.74E+11 30 5785909439

Total 1.96E+11 31

Branch & Staff Productivity of RRBs in India

The table 3 enlightens that the business of all the RRBs in India, increased from Rs. 63,168.70 crore in 2001-
2002 to 5,22,327 crore in 2015-2016, recording an increase of 8.26 times. The increment in percentage of total
business took place because deposits and landing operations registered the growth of 15.39% & 14.55%

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respectively in the year 2015-2016.

The per-branch productivity of business of RRBs increased from 4.39 crore in 2001-2002 to 24.99 crore in
2015-2016 recording an increase of 5.69 times. During the same period the per employee productivity of
business also increased from Rs. 1.04 crore in 2001-2002 to Rs. 4.98 crore in 2013-2014 recording an increase
of 4.79 times. Because of not Availability of data, per-staff productivity was not calculated for last two years.

The performance of pre-branch productivity and per-staff productivity of RRBs were compared using ANOVA
to test whether the merger process has resulted in improving the productivity performance of these banks in
India during 2001-2016 or not.

The hypothesis framed as follows

HO: There is no difference in the performance between Per-Branch Productivity and Per-Staff Productivity
H1: There is difference in the performance between Per-Branch Productivity and Per-Staff Productivity

The ANOVA test result shows that the mean level of per-staff productivity 2.293333333 is less than that of per-
branch productivity 13.25489477. According to the test results, the calculated value of F=36.03786652 with a
critical value of .05, the critical F=4.195972. Therefore we may conclude that, this analysis supports the H1 that
there is difference in the performance of per-branch productivity and per-staff productivity of the RRBs.

Table 3 Productivity parameters of RRBs (Rs. In Crore)

Year Business Branches Per-Branch Staff Per-staff
Deposits + advances Productivity Productivity
2001-02 63,168.70 14,390 4.39 60,739 1.04
2002-03 72,256.00 14,433 5.01 70,151 1.03
2003-04 82,463.00 14,446 5.71 69,297 1.19
2004-05 95,013.03 14,484 6.56 68,850 1.38
2005-06 1,11,041.40 14,489 7.66 68,970 1.61
2006-07 1,31,636.14 14,520 9.07 68,205 1.93
2007-08 1,58,077.73 14,761 10.71 67,845 2.33
2008-09 1,87,992.00 15,181 12.38 68,610 2.74
2009-10 2,27,854.05 15,480 14.72 61,582 3.70
2010-11 2,65,149.77 15,938 16.64 70,145 3.78

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2011-12 3,02,721.04 16,909 17.90 74,379 4.07

2012-13 3,48,566.00 17,861 19.52 75,447 4.62
2013-14 3,98,900.00 19,082 20.90 80,100 4.98
2014-15 4,53,973.00 20,024 22.67 NA 0.00
2015-16 5,22,327.00 20,904 24.99 NA 0.00
 Source Annual Reports of NABARD, From March 2001 to 2016

Anova: Single Factor

SUMMARY
Groups Count Sum Average Variance
Per-Branch Productivity 15 198.8234215 13.25489477 47.40418534
Per-Staff Productivity 15 34.4 2.293333333 2.608138095

ANOVA
Source of Variation SS Df MS F P-value F crit
Between Groups 901.1687181 1 901.1687181 36.03786652 1.8146E-06 4.195972
Within Groups 700.1725282 28 25.00616172

Total 1601.341246 29

Recovery Performance of RRBs In India

The timely recovery of loan amount is a very essential for any bank and RRBs are not an exemption of this. It
has been recorded that RRBs are performing well with respect to branch expansions, deposit mobilization and
lending operations, but RRBs never record 100% recovery in any year since formation.
Table 4 shows an improvement in the recovery percentage during 2001-2016, from 70.59% as on 30 June 2001
to 82.51% as on 30 June 2016. The minimum recovery percentage was recorded is 70.59% in June 2001 before
merger and 77.85% in 2009 after merger. Afterwards, the recovery performance of RRBs gradually improved
except 79.49% in June 2015. It is clear from the table 4 that RRBs are facing difficulties in recovering the loan
amount; the recovery performance of RRBs is not that much satisfactory this can affect the overall performance
of RRBs.

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